If you are behind on your taxes or have not paid taxes in the past, tax relief may be available from the federal government to help you get out of a financial bind. Most people who are behind on their taxes or who owe a large amount that they are unable to pay don’t realize that this form of tax relief help takes many forms that vary depending on the individual’s situation.
The federal government offers a lot of options for people who are unable to pay the taxes they owe, but they don’t spend a lot of time advertising this fact because they would prefer to get the full amount if they can. There are many tax relief organizations and specialized tax services that can help consumers, however. These are often staffed with tax attorneys and former IRS agents in order to give individuals the benefit of in-depth knowledge of the federal tax system.
Being Considered for Tax Relief
The IRS will generally consider a proposal for tax relief if there is ample evidence that you are willing to make a partial payment of what is owed and you are not in the position to make full restitution due to your financial situation. You should also have a legitimate proposal to pay a percentage of the taxes owed that would be acceptable to the federal government. This is one of the main reasons contacting an expert is a good idea – he or she knows what type of an offer is likely to be accepted.
What Kinds of Tax Relief are Available?
Penalty Abatement- Many individuals who fall behind on their federal tax obligations are shocked to discover that the interest and penalties they owe are substantial. Penalty abatement reduces, stops the accumulation of or eliminates the penalties for past due taxes.
Offer in Compromise – This is what it sounds like – you are offering a compromise to the IRS, usually pennies on the dollar, for what you owe. The IRS will often accept this so that they can get paid now rather than try to drag you through the court system for the full amount later.
Installment Agreement – The IRS will sometimes agree to set up an installment plan to pay your past due taxes in order to allow you more flexibility if you cannot come up with a lump sum.
Disaster Tax Relief – This is a rare form of tax amnesty given to specific groups either forgiving them of taxes for a specific year or allowing them a lengthy extension due to a disaster. The most recent such blanket tax relief was granted to the victims of Hurricane Katrina.
If you receive notice from the IRS that you owe back taxes, interest and penalties be sure to consult with someone who specializes in tax relief. They can help you significantly reduce your tax debt and get you back on track.